[88smileys]

Hello,

I am new to this forum and would like to pose a question. I have been working for a neighbor who owns his own property preservation business. I have an opportunity to purchase his existing business, if a small business loan is obtainable, or try and start my own. My primary source of income is teaching high school, however, I was lured into how much money could be made in this line of work. In addition, I would think it could be a great family business that my eldest son and daughter could run for me after they become skilled. I have read some of your threads and it seems as if this is a very stressful endeavor. We spent 15 hours at one house doing trash out and cleaning and I saw what my neighbor was being paid. Moreover, I have seen how much can be brought in for installing water heater straps, CO2 detectors, and fire alarms. I hope that you are open, honest , and I appreciate your candor. As stated, I think if this could work, my son could find his way in life and this could possible be the stepping stone he may need. Not to get to personal, he has hopped from major to major in college and hasn't decided what he wants to be when he "grows" up. Thank you

88

 

[Kent Whitten]

I think your neighbor is handing you a big pile of ****. Don't fall for it. Ask him for his financials from the last 3 years if it is such a huge money maker.

Side note, you are not saving your son from anything. He needs to find his own way. It's tough, but let him go and find what he needs to learn.

 

[BPWY]

88, Kent had some good advice.


Also ask your neighbor about the charge backs and slow pays out to 60 to 90 and even farther days out.
Before you think hes making a killing ask to see what hes actually made at the end of each year. ESPECIALLY in the last year.

As for your boy............. whose to say he won't hop out of the family business right when you need him the most?

 

[FremontREO]

I'll keep my mouth shut.

 

[GTX63]

There are a fraction of companies making a comfortable profit at this business vs even three years ago. REO/Preservation is not a long term business model. It is now, at best, a side job to supplement your main revenue streams.

 

[mbobbish734]

There are a fraction of companies making a comfortable profit at this business vs even three years ago. REO/Preservation is not a long term business model. It is now, at best, a side job to supplement your main revenue streams.

What he said. There's no gold at the end of the rainbow. Can you make a comfortable living? Yes, but if your teaching now you probably make more and work less hours. Why is he getting out?

 

[88smileys]

Thank you

Where to start? I know that it sounds fishy, but my friend is a realtor, just sold his last house (for a huge profit) he then bought a local business. I am in no way thinking about getting out of teaching ever, I just thought maybe if I could do this two days a week and my son did it three days a week, that we could supplement our incomes. I know that my son needs to make his own decisions in life, but we did one house together and he has my same drive in life. In addition, he makes sure that things get done right and doesn't take unnecessary short cuts like I've heard others do. I want to thank everyone for their response. There was some great info, keep it coming if you feel that it is important to know. I am more than happy to just teach and never walk into another disgusting home. I love teaching high school, but the $2k trash outs and the $800 water heater straps, CO2 and fire detector jobs I thought were standard. Thanks

88

 

[mbobbish734]

Where to start? I know that it sounds fishy, but my friend is a realtor, just sold his last house (for a huge profit) he then bought a local business. I am in no way thinking about getting out of teaching ever, I just thought maybe if I could do this two days a week and my son did it three days a week, that we could supplement our incomes. I know that my son needs to make his own decisions in life, but we did one house together and he has my same drive in life. In addition, he makes sure that things get done right and doesn't take unnecessary short cuts like I've heard others do. I want to thank everyone for their response. There was some great info, keep it coming if you feel that it is important to know. I am more than happy to just teach and never walk into another disgusting home. I love teaching high school, but the $2k trash outs and the $800 water heater straps, CO2 and fire detector jobs I thought were standard. Thanks

88

I'll tell you right now that's nowhere near normal pricing. With your neighbor being a realtor ill bet he's falsifying bids to get them prices(seen it before) and once he's gone so are those prices. Not to mention its illegal. What he did in that house would normally be about $500-600 total and that's if your lucky. The Realtors doing this are coming under fire lately. Also thus business is not 5 days a week its 24/7 and if can't do that your out.

 

[88smileys]

Now these are the things I need to know. I've seen the invoices that say $690-$890 per. I know that a minor trash out, plus yard maintenance, plus CO2, water heater straps, and smokes were the higher money. I do not know if $2k trash outs are real? Ive had to take about a thousand pics while performing the banks work, I've had to go on call backs, which lower your bottom line. I want honesty and it seems like its coming. I've read and heard Nationals can make you/break you/cause you to go insane. He told me that there were months he was carrying $35k-$55k in debt waiting for payments. His wife (co-owner/secretary) would have to be on the phone all day sending in invoices, demanding payment, and getting nit picked about every little thing they did at each house. Keep it coming, I need to know it all. Besides, no one on this planet will give me a S B A loan for cleaning/fixing foreclosed reo properties.

88

 

[BPWY]

I've done trash outs that were North of 10k.
Are they common? Nope, but can happen.
Even 2k isn't common in my area.

 

[GTX63]

If you have read the threads on this forum for any time at all, you would not be asking us to "keep it coming." It sounds like you are looking for someone to reinforce what you already want to do.
Regarding the sba, what would the loan be for? You cannot buy a Property Preservation business. None of the accounts are ever guranteed. Doesn't matter what part of the country you reside, your only promised the job you have in front of you. You can purchase some trailers, mowing equipment, etc, but you better have a plan and contacts in place for the private sector. Just trying to save you some grief and regrets down the road.

 

[88smileys]

I'm glad you're honest. We took four trailer loads (five foot by ten foot) trailer out of the yard and house, which was nasty. If you add up disposal costs, plus materials, labor, gas, and lunch, that $2k is more like $1400 profit. Plus it was a 15 hr day, more like 30 man hours if 2 people times 15 hrs.

 

[88smileys]

Thank you, I was hoping for helpful info to make an educated decision about possibly getting into this business. As far as the keep it coming, I'm new to this and trying to figure it out! I am very cautious and am not looking to give up anything, just looking for advice

 

[GTX63]

5 years ago, 5K, 7K, 10K trashouts were weekly. Not anymore.
Many/most cleanouts are 10 cyds or less.
You may wish to work 2-3 days per week, but you are at their beck and call. The order comes in on Friday at 6 p.m., it is most likely due Sunday or Monday at the latest.
Nationals will require specialized insurance you cannot get locally. Figure 2500 to 3K for a start up policy which will increase alongside your revenues. Working as a sole prop will set you up for financial ruin if you are ever issued a chargeback or sued. Not trying to run you off. There are realities in this business that new guys try to pretend don't apply to them. This ain't Fred and Lamont.

 

[88smileys]

5 years ago, 5K, 7K, 10K trashouts were weekly. Not anymore.
Many/most cleanouts are 10 cyds or less.
You may wish to work 2-3 days per week, but you are at their beck and call. The order comes in on Friday at 6 p.m., it is most likely due Sunday or Monday at the latest.
Nationals will require specialized insurance you cannot get locally. Figure 2500 to 3K for a start up policy which will increase alongside your revenues. Working as a sole prop will set you up for financial ruin if you are ever issued a chargeback or sued. Not trying to run you off. There are realities in this business that new guys try to pretend don't apply to them. This ain't Fred and Lamont.

That's the valuable info I need. Thank you

What's a chargeback?

 

[BPWY]

Keep reading existing threads.
There are hours and hours of info.

 

[warranpiece]

That's the valuable info I need. Thank you

What's a chargeback?

Hey 88. I don't think anyone wants to discourage you from doing what you think is best for you or your family. But if you were my friend, and you were thinking of doing this, I would suggest you do something else.

I am not sure where you are located, but that will probably play a part. Think about it this way, you are coming in on the back end of a cycle here. So you already know there is an expiration date on volume. In addition, this is not a buisness you need to "purchase" unless your real estate agent friend is also selling you trucks, computers, a corporation he set up, etc... Finally, you never even consider bbuying a buisness unless you look at 3 years of financials. And I mean LEGIT done by a bookeeper financials so you can see trends. Who are the clients? Where does the money come from? Maybe he really does have special connections? What happens to those? What is his incentive to sell if it is profitable?

etc...

But like everyone else, I think we would try to discourage you from doing this, not knowing much about you. Don't let hope make a decision for you. Let your mind do it.

 

[88smileys]

Thank you

No I was just looking for advice, especially since I understand we are at the end of the massive foreclosure swing. My friend wanted me to buy his LLC along with tools, truck, trailer, and this included his "contacts" in the bank and his "contracts" for 100 homes. I am very skeptical and was wondering if it where allntongood to be true. I realize this is a cutthroat business and do not want to bankrupt my family just to make some quick cash. Thank you for all responses, it does help.

 

[Kent Whitten]

88, Kent had some good advice.

Hold on just a second.....I'm making that part of my signature line :laughing:

 

[warranpiece]

No I was just looking for advice, especially since I understand we are at the end of the massive foreclosure swing. My friend wanted me to buy his LLC along with tools, truck, trailer, and this included his "contacts" in the bank and his "contracts" for 100 homes. I am very skeptical and was wondering if it where allntongood to be true. I realize this is a cutthroat business and do not want to bankrupt my family just to make some quick cash. Thank you for all responses, it does help.

Ok how about this. Ask for the "contracts". When do they expire? Are they actual contracts? None of what you said makes sense from our perspective.

Why not just ask him to let you do it all without up front cost, and he can have 10% of your profit.

Like I said bud, this would not be the place I steer you at this particular point in time, and as far as being a long or short term solution for your boy let me just be frank.

It isn't.